There are both strong and weak signals that enable us to develop some sort of a view about how business models are evolving around the world. This evolution will impact upon the way businesses need to adapt and evolve in the Caribbean region over the next decade.
Re-thinking the future of business
A fascinating series online recently examined how business models are evolving. A highly centralized and hierarchical model has dominated in the past. However, now it is a characteristic of just over 28% of businesses. In recent years close to 60% of businesses internationally have moved to a ‘hub and spoke’ or ‘multiple hub and spoke’ model which results in a more decentralized approach. Just below 11% of businesses are totally decentralized and face a risk of becoming chaotic. Brian Solis, an expert in the field of evolving business models, suggests that the ultimate model for the future may be a network of hub and spoke models built around one common brand (which is a promise). He was focusing upon the way social media is influencing business model evolution. But the models he is describing are happening right across the board in a range of sectors, not just those highly dependent upon social networks. GE’s ‘Ecomagination’ is an excellent example. Duane Dove’s international cluster of cocoa, rum and coffee associated businesses is another closer to home example.
Seven sectors to invest in.
China is focusing on investing heavily into and developing seven key sectors for the future. They are:
Energy saving and environmental protection
New generation IT
New energy vehicles
Who would ever have thought we would see ‘ethical gold’ on the market. The Cotopata Mining Cooperative in Bolivia has become the world’s first certified ‘Fairtrade’ and ‘Fairmined’ mining group in the world. A number of others are expected to join the initiative in the near future. 20 high-profile retailers, including royal jeweller Garrard in the UK, are offering gold products that bear both hallmarks. The objective is to improve the safety and health status of miners. The move links closely with changing consumer perspectives about where things come from and what is happening to the people involved at the source level. This type of focus shift – socially minded business - is now impacting across an increasing range of sectors including agriculture, clothing, and now mining.
How quickly things change
The rapid evolution of mobile technologies is beginning to impact on email usage. In 2010, total email volumes dropped 8% from the previous year. But what is particularly startling is the fact that usage amongst 12 – 17 year olds dropped by 59%. It was only in the 55 – 64 and over 65 year age groups that email usage increased. Young people are switching to mobile and social networking channels as their primary means of communications. This has major ramifications for businesses and the technologies they employ. Unless they are able to engage with the upcoming generations through the communications channels that they are moving to, then they will face challenges attracting and retaining them as staff or being able to do business with them. Every marketing department is going to need to employ a future-focused under-25 year old technology whizzkid as part of the team!
What does this mean for the region?
The region is characterised by far too many businesses using ‘yesterday’s models’. The way in which business models are likely to evolve over the next decade is clear to see, as are the major associated future opportunity areas. The big challenge for businesses and sectors in the region (as well as the relevant public sector agencies) is being able to develop a transitional strategy that is in tune with the changes taking place. If change does not happen quickly enough, then there is a real risk of being out of step with the very things that are needed for the countries in the region to thrive in future years.
Useful links: Business models 7 Industries Fairtrade gold Email is so yesterday!
What do you think? What can we do to help accelerate the transition of business models in the region so they become ‘future fit’?